Tata Steel signs 500 million pound-deal with UK govt for Port Talbot plant

The United Kingdom on Friday announced a joint investment package with Tata Steel worth £1.25 billion (about $1.55 billion), including a government grant of £500 million ($621 million,) to secure the future of Port Talbot operations in Wales — the country’s largest steelworks — giving a fresh lease of life to the structurally weak business.

The joint investment package said to be the largest in the UK steel industry in decades would pave the way for greener steelmaking at the Welsh unit, by replacing coal-powered blast furnaces nearing the end of their effective life with a state-of-art 3 million tonne electric arc furnace (EAF). 

The move is aimed at reducing the UK’s entire carbon emissions by around 1.5 per cent.

The £500 million grant -- one of the largest support packages from the UK government -- is subject to relevant regulatory approvals and consultation processes. Tata Steel's share, about £700 million, would be funded largely through internal equity.

Tata Sons Chairman N Chandrasekaran said the agreement with the UK government is a defining moment for the future of the steel industry and the industrial value chain in the UK. “It has been an absolute pleasure to work with His Majesty’s Government and the Honourable Prime Minister Rishi Sunak in developing the proposed transition pathway for the future of sustainable steelmaking in the UK,” he said in a press release by Tata Steel.

The proposed investment, he said, would preserve significant employment and it presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales.

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